How companies should deal with marijuana legalization

When voters inWashington and Colorado voted Nov. 6, 2012, to legalize the recreational use of marijuana, it set off alarm bells for in-house counsel in those states. They peppered their outside counsel with questions about whether the new state laws jeopardize corporate zero- tolerance drug policies and drug-testing programs.

For now, it appears their concerns are largely unfounded. Employment lawyers are advising clients the laws do not require substantive changes in corporate policies because marijuana is still banned under federal law. They cite decisions by

four state supreme courts and one federal court of appeals in cases that upheld employers’ right to enforce a drug-free workplace even if an employee is legally taking pot for medical reasons.

Nonetheless, experts acknowledge state statutes permitting people to use marijuana recreationally may create confusion among employees about whether it is still a banned workplace substance, and advise employers to clarify their drug policies in light of the new laws. And they acknowledge it is inevitable that plaintiffs lawyers eventually will challenge the dismissal of employees found with pot in their systems.

“My message has been, things are OK for now, but give it a couple of years and we’ll see,” says Richard Meneghello, a partner at Fisher & Phillips. In the meantime, it’s business as usual. “Go ahead and enforce your zero-tolerance drug policies regardless of the reason for marijuana use, whether medical or recreational, without regard to the new state laws. That is the position that employers have been wanting to take, and they seem relieved to hear they can do that.”

Challenges Predicted

Both the Washington and Colorado laws allow adults older than 21 to possess up to one ounce of marijuana and call for the establishment of state licenses for stores to sell the drug.

Colorado’s Amendment 64 specifically states: “Nothing in this section is intended to require an employer to permit or accommodate the use … of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.” Washington’s Initiative 502 doesn’t specifically address employer issues.

Under Colorado law, it is unlawful for an employer to terminate an employee for engaging in lawful activity outside the workplace during nonworking hours. Employees could potentially use that statute to argue that because recreational marijuana use is now legal under Colorado law, an employer cannot prohibit an employee from engaging in such use while off duty.

Washington doesn’t have an off-duty conduct law, but legal challenges to employer actions against recreational marijuana users in the state are likely as well. Meneghello says he has already seen a Washington plaintiffs lawyer quoted as saying it would be a “miscarriage of justice” to fire someone for recreational marijuana use, now that it is legal in the state.

That kind of talk could lead to an employer backlash if employers feel they are being forced to permit something they view as creating workplace safety and productivity issues, says Mark Mathison, a principal at Gray Plant Mooty.

“They may be willing to take the fight and get a ruling on where the line should be drawn,” he says.

Uphill Battle

However, court decisions involving medical marijuana use by employees suggest that plaintiffs seeking employment protection for recreational users will have an uphill climb. Two 2011 Colorado court decisions, Beinor v. Industrial Claim Appeals Office and Hall v. Direct Checks Unlimited, found that the use of medical marijuana is not lawful off-duty conduct, and employees cannot claim protection under that law.

Court precedent in cases involving the obligation of an employer to accommodate medical marijuana use in states where it is legal (currently 18 states and Washington, D.C.) also favors employers.

“In every state where the issue has reached the state supreme court—California, Washington, Oregon and Montana—the court has said the employer does not have to accommodate medical marijuana use,” says Nancy Delogu, a Littler Mendelson shareholder.

She also points out that in September 2012, the 6th Circuit ruled in Casias v. Wal-Mart Stores that Wal-Mart had the right to terminate a Michigan employee who used medical marijuana. The appeals court agreed that while the Michigan Medical Marijuana Act was meant to protect medical marijuana users from arrest and prosecution, it does not regulate private employers or employment decisions.

Arizona, Connecticut, Rhode Island and Maine all have state laws requiring employers to accommodate medical marijuana use, but none has yet faced a court test, according to Delogu. That creates a dilemma for employers.

“Federal law may preempt those laws, but on the other hand, do you want to be the test case?” she says. “Those are very specific decisions inside counsel need to focus on, on a state-by-state basis.”

Clarify Policies

Delogu recommends that employers continue to ban all illegal drug use but warns that employees in Washington and Colorado may be confused about why their employers still have a zero- tolerance approach toward marijuana. As a result, companies may need to revise the wording of their drug policies.

For example, a policy that prohibits the use of drugs “illegally obtained” may cause an employee to think marijuana legally obtained under state law is acceptable. Instead, Delogu recommends banning drugs “made illegal as a matter of federal, state or local law, including marijuana.”

Meneghello also recommends restating drug-testing policies to specify that any amount of marijuana in a person’s system violates the drug policy, so an employee cannot claim he passed the test if the level of marijuana in his system is less than what the state considers an impaired level in its Driving While Intoxicated law.

He also advises training managers to answer questions from employees about why the company bans recreational marijuana use while the state allows it. He suggests using an analogy to alcohol, which, although legal, is grounds for dismissal in many companies if it shows up on a urine test.

“Just because something is legal doesn’t mean you can’t prohibit it in a company policy,” he says. n